Revenue up by 18% for Afdis in Zimbabwe

HARARE - Distell’s unit in Zimbabwe, African Distillers (Afdis), has remained resilient as alcohol consumers switch from lager beers to spirits and cheaper whiskies, with the company saying interim revenue jumped 18 percent to $16.5 million (R192.6m), translating to a dividend of 0.40 US cents a share for the period.

The company suffered a $0.4m foreign currency loss owing to the appreciation of the rand, while it was also unable to meet demand in some categories owing to foreign currency shortages.

Zimbabwean businesses have been suffering liquidity constraints that have impacted on operations and dividend remittances for international shareholders, according to finance directors in the country.

“The company incurred a foreign exchange loss of $0.4m due to the firming of the rand, and compounded by the delay in settling foreign creditors occasioned by foreign currency shortages,” Pearson Gowero, the chairperson of Afdis, said yesterday.

But this was partly mitigated by “finance income of $0.1m earned from short-term investments”.

Cash balances for the company increased by $9m to $13.1m, owing “to delays in settling foreign” obligations.

After-tax profits for the period increased from $1.7m in the prior contrasting period to about $2.7m for the half year to December, 2017.

Attributable earnings per share resultantly jumped from 1.52c a share to 2.38c a share.

This was driven by “a satisfactory performance”, which came “despite the challenging trading environment”.

The ready to drink category grew by 2percent over the prior period, although shortages of these products such as ciders also hampered growth.

“The spirits segment continued to be the dominant contributor to total revenue, followed by ready to drink products and wines. Of significance is the whisky category, which grew by 7percent, aided by a newly introduced brand,” Gowero said.

Analysts said the alcohol market in Zimbabwe was trending towards cheaper spirits and value packs. However, as shown by Afdis performance, ciders and wines have also remained resilient and experts say this is because of slowing down of imports of such products owing to foreign currency shortages.

Zimbabwe consumers are grappling with unemployment and sliding disposable income.